A micro-lens for project resource management

Experienced project professionals have dozens, if not hundreds of frameworks and methodologies to guide the development and management of their projects. Terms like “lean” and “agile” have infiltrated the common lexicon. But as someone who often works with new entrepreneurs, community leaders, and other informal project managers, we believe these frameworks often come up short. In this essay, we propose a new micro-level framework to better support project decision-making.

First, it is important to stress that this is not intended to refute the existing project frameworks and methodologies. Many of these widely adopted approaches have demonstrated value, enabling innovative startups and established corporations alike to grow and scale. However, these frameworks have two general flaws:

1. The value of these frameworks is most evident at the hands of an experienced practitioner, often requiring additional certifications and training. This presents a barrier to low-resource projects.
2. Most relevant to this discussion, these methods are often oriented towards a macro-level perspective — they provide a consistent overarching structure and process, often optimized towards controlling a specific facet of a given project. They typically offer very little guidance around micro-level decision-making.

In our experience, the primary challenges for low-resource projects revolve around 1) the evaluation of alternatives (i.e. which option allows for the best outcomes and greatest likelihood for success) and 2) the sequencing of activities to reach a desired outcome (i.e. what order of actions best grows project capacity). These central questions demand an ability to accurately evaluate a given project’s capacity at a specific point in time, be it past, present, or one of many hypothetical futures. The proposed Resource Management Framework offers an opportunity to consistently assess a project state for capacity and efficiency across several resource categories, thus providing much-needed context for micro-level decision-making.

This initial post will center on a brief overview of our Resource Management Framework. Future posts will offer a discussion on applications, methods for quantifying, and the implications of this perspective.

The Framework

The Resource Management Framework (presented here as version 2.0) consists of five resource categories (discussed in greater detail below): Financial Capital, Human Capital, Social Capital, Technical Capital, and Temporal Capital. We posit that every project action represents a transactional resource exchange. Furthermore, the goal of effective resource management centers on the ability to increase a project’s overall capacity in support of broader objectives. Project success, therefore, demands a positive net gain in capacity as a consequence of activities and resource conversions. For each resource category below, we propose a means for operationalization and a metric for efficiency.

Financial Capital

Perhaps the most straightforward resource category, Financial Capital refers to the financial resources available to a given project. Beyond cash, this category also includes investment vehicles, loans, supplies/materials, and inventory. Financial Capital is operationalized as currency (e.g. dollars) and efficiency is measured as the rate of return, which has no theoretical bounds.

Some complexities to note. First, in this framework, supplies and materials (pre-production) and inventory (post-production) are considered financial resources. Analogous to investment vehicles, these goods are purchased with the intent to generate revenue. Whereas investments leverage Temporal Capital to increase financial value, these goods leverage Technical and Human Capital.

Second, fixed assets like Property, Plant, and Equipment depend heavily on usage and intent. Assets purchased as production tools are considered Technical Capital whereas assets purchased for resale value are considered Financial Capital.

Human Capital

Human Capital represents the internal project team and their skillsets. This is operationalized as person-hours per period (e.g. hours per week). Human Capital efficiency, therefore, becomes a measure of skill and mastery with a theoretical maximum value at 100% mastery.

Social Capital

Social Capital represents the influence of a given project and often encompasses marketing activities. This is operationalized as reach (e.g. number of people), efficiency is measured by conversion rate, and the theoretical maximum value occurs at a 100% conversion rate.

Technical Capital

Technical Capital refers to the physical and digital tools your project utilizes. This is operationalized as a gain in human capital (e.g. increase in hours per week). Efficiency is measured by utilization with a theoretical maximum value at 100% utilization.

Temporal Capital

Temporal Capital refers to the time invested in learning, planning, and strategy. This is perhaps the most difficult to conceptualize as the short-term value is often unclear. Ideally, Temporal Capital would be operationalized as the value of insights gained. Realistically, the time invested (e.g. hours) can be used as a suitable substitute. Efficiency is measured by an estimated return on investment (relative to historic performance) and has no theoretical bounds.

Capacity

Capacity represents a project’s ability to undertake activities. We use this term to represent the aggregate available resources. Intellectually, this concept can be considered the sum of the five resource categories. Practically, quantifying this metric can be complex but typically involves converting each resource type into base currency units. Additionally, some projects may choose to present total capacity not in terms of currency but rather as potential production units or a standardized “capacity unit.”

Conclusion

The Resource Management Framework we have presented allows project teams, including informal project leaders, to view each action as the simple conversion of resources. We can then conceptualize the relationship as a mathematical statement comparing the inputs (or costs) to the outputs and better visualize the subsequent impact of a given decision. Net gains in total capacity (achieved through either positive conversions or increased efficiency) are, thus, strategically advantageous decisions.

Additionally, this framework allows us to attend to a common pitfall: trapped or locked resources. Most often, this occurs when the pathway between a major resource investment and full utilization includes distinct, costly, but independent activities. The alternative typically involves resequencing activities to shorten the distance between the initial investment and full utilization.

Lastly, it is important to note the impact of poorly executed actions. When suboptimal decisions are forced (typically due to resource constraints), there is often a penalty to total capacity. The steady but regular decline in total capacity can be a major indicator of imminent project failure and must be addressed immediately.

This short post is meant as an introduction to our Resource Management Framework. We understand much has been left unsaid. Over the next few posts, we hope to further illustrate the value of this perspective through conversations, case studies, walkthroughs. We hope this initial post sparks your interest in a new perspective on project resource management and eagerly look forward to robust dialogue in the future.